Quite a contrast from Tuesday's mayhem, the Sensex turned back on Wednesday. Unfortunately during the final trading hours it slipped once more to the negative region..
The Sensex on Wednesday opened up and held on to gains for most part of the day.
In such volatile times, what strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on rediff.com on Wednesday, market expert Pranav Sanghavi, replied to many such queries. Here is the transcript:
sameer asked, Hi Pranav, What is you take on Videocon industries and Adani enterprise. shall i buy these shares at CMP and can hold it for 1 year period. Thanks
PRANAV SANGHAVI answers, at 2008-07-16 15:56:48Hi Sameer. Videocon is one of the largest players in the consumer white goods market in India and are consolidting their position by not only integrating backwards but also forwards. They have acquired component manufacturing facilities as well as front end retail chain to distribute their finished goods. They also have oil exploration assets on thier balance sheet. So in the short term they may underperform but in the long term they shuld outperform.
riyass asked, Hi Pranav, Where is the indian stock heading towards?. Are we expect sensex to touch around 10000 points.? What is your suggestion for the investors. I already invested around 4 lakhs in the stock market. I already lost around 80K so for. Shall i buy more stocks further? Thanks
PRANAV SANGHAVI answers, Hi Riyas. In the short term like most other markets our also looks o be heading downwards. I still feel things will remain weak for a few months more. I would say you are better off than most. Most people who invested last year in mid-cap stocks are down by over 50%. If you do buy, buy only on massive correctional days like yesterday and only 5 to 10 % of what you intend to buy that too with a 2 year outlook. But most importantly buy frontline qulity profit making companies.
kaake asked, WHAT WOULD BE AN IDAL PRICE OF RNRL AFTER 3 YEARS FROM TODAY..ATLEAST YOU ARE A SPECILAIST YOU CAN GIVE AN INDICATIVE NUMBER
PRANAV SANGHAVI answers, No one will be able to predict its price accurately for 3 weeks down the ine let alone 3 years. The stocks will only perform or not perform after the outcome of its ongoing legal battle with RIL is settled.
deep23 asked, Hi Pranav, I hv 500 UCO bank @35 and 300 Nagarjuna Fert @40. What Should I do?
PRANAV SANGHAVI answers, The midcap stocks have corrected sharp and they will take that much more time to recover as well. The only thing one can do is wait. If you are cofident that the stocks will keep performing then hold on. Or else you could switch to other frontline quality stocks.
SULTAN asked, hI PRANAV,iS IT ADVISABLE BUY IDFC FOR LONG TERM.I WANT TO INVEST 2 LAC IN THIS STOCK ONLY.
PRANAV SANGHAVI answers, Hi Sultan. Istill like IDFC as a stock but I would not jump to get in. I will wait for the negativity to get washed out befor I plunge in to buy. Although it is pretty atrtractive at current levels, it could fall further if the markets correct further.
zxds asked, I have some shares of tata motors, reliance power through IPO,sip in dsp meryll linch,Franklin flexi cap frowth; hdfc infrastructure. How long do you think this will talke to improve?
PRANAV SANGHAVI answers, If you are a long term inestor then Tata Motors can surely be held. Reliance Power I am not too sure about. I think the markets could take anything from 3 to 9 months to recover from the bearish phase.
Raj asked, Hi Sanhavi, I bought the following shares. Bajaj holding & invest, TELCO, TISCO, Ultratech cement, Grasim, Canara bank, ICICI, GMR Infra, IDFC, RCOM, REnergy, SBI, DLF, Suzlon, Jindal Saw, Tata Chemical, BHEL, HDIL, Pantaloon retail, Tech Mahindra, Infosys. I can hold it for 1 year timeframe. Please suggest whether i will get a good profit in 1 year time.
PRANAV SANGHAVI answers, I think you have a fantastic mix of stocks. You should go on a holiday and not worry about your investments. Hold on for over 1 year and you should see decent returns from current levels.
ravimittal asked, What do you think about ICICI bank from 2-3 years of prespective
PRANAV SANGHAVI answers, In the short term due to the CRR hike and SLR the banks are facing a tough problem maintaining their NIM's. NIM being Net Interest Margins. But in the longer term an aggressive bank like ICICI will surely beable to tackle the situation and remain profitable.
Arun asked, hi. i hv 10 RIIL @ 1213
PRANAV SANGHAVI answers, RIL being an index heavy stock it will remain pretty volatile like the markets. When the markets do rebound back I am prtty sure RIL will be one of the major stocks to be a party to the same.
SRV asked, Hi, Please suggest some good large cap, mid cap, small cap stocks in IT, Metal, Real estate, Infra, Shipping, Oil & Gas, FMCG, Bank, Textile and Cement sectors. Thanks.
PRANAV SANGHAVI answers, You have pretty much mentioned sectors covering 70 to 80% of the market. I will name a few stocks which I like from the sectors you mention. Infosys, TCS, JSW Steel, Sesa Goa, DLF, Unitech, ITC, SBI, HDFC, Grasim, GUj Ambuja.
sukant asked, Hi Sanhavi, I bought the following share CIPLA share for the Past 1.5 Ys, pl. suggest
PRANAV SANGHAVI answers, The pharma and to an extent the IT sectors are the two sectors who have not corrected as much as the markets. Cipla is a decent bet with a 1.5 to 2 years outlook. You could hold on.
Krish asked, I have MIRC electronics bought at 30 rs... can you please tell me when can this stock reach 30 rs again ?
PRANAV SANGHAVI answers, If I could make such predictions I would be as rich as Bill Gates. But for midcap stocks I would say you will need to wait for atleast 9 to 12 months for them to recover. Plus there is a seperation battle going on between the Mirchandani brothers. So it may dampen the spirits of the stock.
SANJEEV asked, HAI PRANAV, HOPE U ANWHER MY QUESTION TODAY I HAVE BOUGHT 2000 SHARE IN BGR ENGERGY ONLY AFTER VIEWING THAT IT HAS SECURED ORDER WORTH RS. 3900/- CRORES, ITS TOTAL ORDER BOOK STANDS AT 11000/-. PLEASE GUIDE ME WHETHER I SHOULD PURCHASE MORE OR WAIT FOR CORRECTION, I AM READY TO HOLD THE STOCK FOR AT LEAST ONE YEAR OR SO
PRANAV SANGHAVI answers, I Sanjeev. I am sorry but I don't follow the stock so will not be able to helpo you. But at this juncture I would do a thorough due dilligence before investing into any stock.
vamsi asked, Dear Sir, I have only 2 shares RCOM 1000 @ 600 and RIL 500 @ 3050 when will i get profits also whats the future for telecom
PRANAV SANGHAVI answers, You have got in at reasonably high levels. I think you will have to wait a long time before you can see those prices.
Pranavaa asked, hey Pranav, How r u? when will it touch 5000. :(
PRANAV SANGHAVI answers, Hi Pranava and I am fine thank you. I think for the Nifty to touch 5000 it will take a long and labourious time. If you mean the Sensex then I don't know what to say.
SRA asked, Hi Pranav, If i buy L&T and Sesa goa shares by this month, shall i eligible for bonus share, dividend and stock split?. What would be the recommended buying price?
PRANAV SANGHAVI answers, Yes you shall be if the demt shares are credited to your demat account before the record dates annunced by both the companies. You would need to confirm the dates with your broker.
RakeshV asked, Hi Pranav, Is Tata Steel safe bet at Rs. 590-610 for meidum term.. How is Visa Steel & at what price should I enter into it..
PRANAV SANGHAVI answers, I think Tata Steel would be a safe bet but you should have a long term outlook. In the shrt term the metal stocks especially steel may not outperform the markets.
PRADEEP asked, IF I SELL A SHARE ON THE LAST RECORD DATE, SHOULD I BE ELIGIBLE FOR BONUS SHARE & DIVIDEND
PRANAV SANGHAVI answers, If you transfer your demat shares on the day after the record date to your broker for delivery in to the exchange then technically yes you would be.
MANISH asked, Hie. Pranav, I have 150 RPL @ Rs 230/-, and 100 DLF @ Rs 460/- . What should I do, what do u think , plz suggest
PRANAV SANGHAVI answers, You would have to hold on. You should see your prices but you would have to wait for a year atleast.
rkr asked, I am holding syndicate bank @75 and graphite india @64 shall I hold them for long
PRANAV SANGHAVI answers, Yes
you would have to.
manoharan asked, Mr.Sanghavi, Can we start investing from here the sensex level to cover up our losses. Because we are already loosing 55% of our investments.
PRANAV SANGHAVI answers, You would have to be careful before investing currently as the markets still look weak. You could ee lower levels and not much higher levels for some time which would render your fresh ivestment also unprofitable. So unless you are prepared to hold on for say 1 to 2 years I would not jump in to buy fresh stocks.
SurenM asked, I have 2500 idea @ 90 .. can i hold this for next 4 month ?
PRANAV SANGHAVI answers, Yes I think you could.
seenu asked, can i exit adlabs & sasken or hold at this levels
PRANAV SANGHAVI answers, As I mentioned earlier, the midcap stocks will take that much more time to recover this downturn. You would have to hold on for a much longer time to see profits.
Alok asked, I also have India Bulls Securities @ 133.Currently its trading at 65.how long do i need to hold in order to book some profit?
PRANAV SANGHAVI answers, India Bulls securities will take a long time to see those levels due to the current and ongoing state of the markets over the last few months. Their performance will surely get affected in the short term.
Harshaw asked, Hi Pranav, I have shares of Deccan aviation at 71.40. do i hold or sell and please recommend some mid cap,small cap and large cap shares i can invest for the next three to six months
PRANAV SANGHAVI answers, All aviation stocks are a risky bet and in the current market scenario even more so. I would not look at aviation stocks in the short term especially with the rising fuel prices.
nnn asked, I purchased axis bank at 660, can i hold. And what price can I buy ICICI bank
PRANAV SANGHAVI answers, Despite decent results Axis Bank has got hammered. You would have to wait for a while before you see higher levels.
manoharan asked, Mr.Sanghavi, Capital Goods Crompton Greaves, siemens and ABB. Can we invest now in this market?
PRANAV SANGHAVI answers, I think most of the caital goods as an indirect link to the perceived real estate and infrastructure down turn have corrected sharply. You could look at them but after a further fall in the stocks as they would correct with falling markets. I would look at L&T, Siemens and ABB.
poonkave asked, general question.. how long sensex will be down like this.. will it reach new heights ?
PRANAV SANGHAVI answers, Markets are cyclical by nature as what goes up must come down and vice versa. We have seen a four year long bull run so if we have a bearish phase of 9 to 12 months its fine. Will it reach new heights, that totally depends on how our corporate setor handle and tackle the various factors affecting their profitability in the short term like rising interest costs, rising fuel prices, infltion and a possible minor rcession.
SurenM asked, I am having 500 Idea Cellular @ 90 .. can i hole this for next 3 months?
PRANAV SANGHAVI answers, I think you could.
sanjaybhai asked, Hi Pranav, i have bought 100 share of ADLAB Films @496, what is the future of this share, whether to hold or exit at the current mkt price
PRANAV SANGHAVI answers, Adlabs would take some time for it to recover and see new highs. It is in the production disribution and exhibition business essentially in the Indian movie business. So a lot depends on how that industry performs with a perceived higher inflationary scenario in the coming times.
gathaji asked, Hello, Bought RCOMM at 525 and Great Offshore bought at 750..What is your opinion?
PRANAV SANGHAVI answers, You will have to wait for some time before you see some decent return on your investment. Both are decent non-frontline stocks.
aditaya asked, what u think about the tatapower! previously the stock was up when others were being hit..but the now it is seing a downward trend! what u think the low for it!
PRANAV SANGHAVI answers, India is a power hungry county and it's demand for power will only increas in the coming times. We shall alsways remain underpoered in the short run and companies like Tata Power who have capacities on ground will benefit. In the long term these stocks will perform better.
RSS asked, Hi there, I spend rs 50000 to buy 25 Grasim shares. Now the market value is Rs 42000 only. Shall i buy more to average it. Thanks in advance.
PRANAV SANGHAVI answers, I would wait for further correction before trying to average the stock. But bear in mind that you would have to hold on the stock for over a year to see decent profits.
arun94x asked, hello Pranav, allahabad bank at 58 with p/e of 2.65 looks very promising.what do u say?
PRANAV SANGHAVI answers, Many banks are currently trading belw 5 and 6 PE ratios. But I would still not jump in to buy. I think some negativity is still left int he bankng sector before you se a jump. One take a 2 year contrarian outlook to the banking sector and pick up quality stocks which are trading at very very attractive PE ratios. But one must also remember the inflation is rising, the interest rates, CRR ratio are on a rising trend which could hamper the growth of banks int he short term.
anand asked, I do not know..how many of us have lost and how much? personally I have lost enough,the larger question is, should we still believe that the Indian mkt is has bright future and continue to hold on our scrips? if yes,how long one needs to hang on?
PRANAV SANGHAVI answers, A lot of people have lost a lot of money but nearly an equal amount have made money also. Those who have invested wisely and done enough homework before investing. In the current downturn their proifts have got erroded. But still Indian markets like most stock markets are cyclical in nature. We had stupendous highs during the Harshad Mehta time and then we saw lows. Then we ha another high during the Ketan Parekh time. And we also saw maasive lows there after especially after the September 11 incident. But we have bounced back up. So eventually we shall rise when and how much would be anyones guess.
Noel asked, Hi...I have purchased 50 shares of DLF @ 461.50. Please advise whether it will benefit me in the long run or not and whether the markets will appreciate or not.
PRANAV SANGHAVI answers, The company has given decent performance for this quarter. It has to be seen if it can maintain a decent performanc over the next few quarters when it is perceived to have a downturn in our economy.
AG asked, If you were to pick 4 stocks that you will buy today, then @11K and @10K levels, which would be those with a horizon of 1-2 yrs?
PRANAV SANGHAVI answers, I would look at RIL, L&T, SBI and Infosys.
jai asked, Hi Pranav, Please inform your views on brokerages stocks especially Edelweisis, India Info, Motilal and Geojit
PRANAV SANGHAVI answers, I think they will take a hit in this quarter and the next couple of quarters considering the state of our markets. Those who are not eavily dependant on brokerage income alone might tide through these tough times for financial services companies.
kalkunteramesh asked, dear sir , do you think that the shares will rally strongly and go back to earlier levels if oil prices drop to USD 100 per barrel? thanks, ramesh
PRANAV SANGHAVI answers, If the curde does g back to US$ 100 levels I think the stocks would surely rally. How much I wouldn't know but they would rally. But that looks difficult in the short term unless there is a mch awaited correction in the crude oil prices. Although the OPEC did announce there was a marginal drop in demand due to higher prices.
PRANAV SANGHAVI says, Well it is time for me to leave. It was nice chatting with you all. Bye for now.
